Running a company is about creating stakeholder value. All the CEO’s in the world know that. But there are many stakeholders and is there any order? I believe in the following order:
- Happy employees believing in the company
- Produce awesome customer experiences, through great suppliers, that generate profit
- Of which part should be given back to society
- And all this will eventually create shareholder value in the long run
O yeah, before the Unions become fans of my blog post or you think I’m some kind of anti-globalist: YOU NEED ALL 4, not only the happy employees…
I’ve been in many businesses, profit and non-profit, in many sectors and I can’t find examples where the order should be different. If you do, let me know!
I’m even convinced that changing the order won’t create ANY value.
- Customers first? Of course listening to customers is crucial, but they are not always right and they definitely don’t have all the info at hand to give the right feedback. It needs to be interpreted by employees. Customers come second, because without them, it’s impossible to make any money.
- Society first? Without profit, you shouldn’t give back. It would be ridiculous and very short-term.
- Shareholders first? I guess we all saw the effect of that in the past years. However, shareholders are crucial. I’ve been in business with good ones and bad ones. The good ones invest for the long run and help to push the company forward. The good ones believe in the order above.
Through my work at Special Olympics I’m even more convinced that people and volunteers come first. You first need a great team that believes in the project, you then need “customers” buying into the project and then you can start giving back to people with an Intellectual Disability. And that’s what will make the Board very happy.
Here’s an inspiring video on the volunteers, the employees, of the Olympic Games 2012 in London.
Every company will probably say they put their people first. But do they actually? We have a great barometer for you: the Hercules Trophy. It’s all about Employer Branding and if you don’t understand that, you probably don’t understand the order above. On one day we can easily tell which ones care and which ones don’t.